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Estate Agents Act 1979 and Property Misdescriptions Act 1991.
Consumers, Estate Agents and Redress Act 2007 (CEARA)
Regulations requiring estate agents engaged in residential estate agency work to join an approved redress scheme dealing with complaints about the buying and selling of residential property, came into force on 1 October 2008. Consumers who experience problems with estate agents now have access to free and independent redress.
The Office of Fair Trading (OFT) recently published a report on home buying and selling in the UK, including the role of estate agents. The Government will respond to the recommendations addressed to it in due course
• Estate agents have to comply with the Estate Agents Act 1979 and the Property Misdescriptions Act 1991 when they act for persons who are buying or selling property.
• The Office of Fair Trading can ban persons from acting as estate agents if it considers them to be unfit to carry on estate agency work.
• Complaints about estate agents should be directed to local Trading Standards Departments, the OFT or approved redress schemes. Advice on how to pursue a complaint can also be sought from Consumer Direct.
• The Government is committed to reforming the home buying process in England and Wales. Sellers are required to provide Home Information Packs (HIPs) when putting homes on the market.
• All estate agents in the UK who engage in residential estate agency work are now required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property.
• The OFT published a report on home buying and selling in the UK, including the role of estate agents, on 18 February 2010. The report makes a number of recommendations to improve the home buying process. The Government will consider carefully the OFT’s recommendations and respond to those addressed to it in due course.
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Estate agents are regulated by the Estate Agents Act 1979, which:
• Regulates the conduct of estate agents in the course of estate agency work (buying and selling, but not letting).
• Lays down the duties that agents owe to clients (such as the passing on of offers, handling money and giving details of charges) and to third parties (such as disclosure of a personal interest).
• Gives the Office of Fair Trading the power to issue warning or prohibition notices against those persons whom it considers to be unfit to carry on estate agency work. Any person that receives a prohibition notice (a ‘banning order’) will not be able to practise as an estate agent.
Estate agents also have to comply with the Property Misdescriptions Act 1991, which makes it an offence to make false or misleading statements about property offered for sale.
If you have a complaint where you believe an estate agent has acted contrary to their duties under legislation, you should contact your local Trading Standards department (www.tradingstandards.gov.uk) or the Office of Fair Trading, which enforce the legislation.
Consumers can also complain to a statutory redress scheme where the complaint is about residential property. Since 1 October 2008 all estate agents in the UK who engage in residential estate agency work have been required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property (including complaints about Home Information Packs).
The Office of Fair Trading (OFT) has approved the following bodies to run estate agents redress schemes:
• The Property Ombudsman (01722 333306 or www.tpos.co.uk)
• The Surveyors Ombudsman Service (0330 440 1634 or http://www.surveyors-ombudsman.org.uk/)
Residential estate agents must by law belong to one of the approved schemes. Estate agents that fail to join an approved scheme are subject to a £1,000 penalty charge, which can be repeated if necessary, and will ultimately be banned from carrying out estate agency work if they refuse to sign up.
The Government is committed to reform of the home buying process in England and Wales in order to make the process quicker, easier and more efficient.
Home Information Packs (HIPs) were introduced in England and Wales on 1 August 2007 and now apply to all homes regardless of size put on the market. Sellers of properties need to have a HIP before putting their property on the market. HIPs must contain an Energy Performance Certificate, searches and other documents including evidence of title. A Home Condition Report can also be included by sellers on a voluntary basis. Providing this information at the start of the house buying process will reduce delays and uncertainties experienced by both buyers and sellers.
Further information on HIPs is available from www.homeinformationpacks.gov.uk or from the Department for Communities and Local Government (who have policy responsibility for housing in England and Wales) at: www.communities.gov.uk/housing/buyingselling/homeinformation/
The Consumers, Estate Agents and Redress Act 2007 (CEARA 07), which received Royal Assent on 19 July 2007, took forward measures in the Government response to the 2004 OFT report on the estate agency market in England and Wales. The Act contains provisions requiring residential estate agents to join independent redress schemes; and gives enforcers improved regulatory tools to tackle rogue agents without unnecessarily driving up costs to house sellers.
Since 1 October 2008 all estate agents in the UK engaged in residential estate agency work have by order been required to join an approved redress scheme dealing with complaints about the buying and selling of residential property. This fulfils the Government commitment that all buyers and sellers (and potential buyers and sellers) of residential property who experience problems with estate agents, have access to independent redress.
Other measures to improve the regulation of estate agents also came into force on 1 October 2008. These provide enforcers with increased powers to enter estate agents premises and inspect documents, and increase the grounds under which the OFT can issue warning and prohibition orders to estate agents.
We are planning to implement further provisions in CEARA 07 in 2011. We aim to introduce formal record keeping requirements for estate agents, who will be required to keep records of their transactions with consumers, including offer letters, for a period of 6 years. Keeping records will provide enforcers with audit trials and better evidence to prove misconduct.
The OFT published a report on home buying and selling in the UK, including the role of estate agents, on 18 February 2010. The report makes a number of recommendations to improve the home buying process. The Government will consider carefully the OFT’s recommendations and respond to those addressed to it in due course.
